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Bitcoin is back. On Thursday, the cryptocurrency hit a new high, surpassing the $ 48,000 level, according to data from CoinDesk.
Even though the asset is highly volatile, those who have kept it long-term have made incredible gains.
For example, if you invested in bitcoin when it first launched in 2009, your return could be infinite, because the asset’s initial value was $ 0.
“Theoretically, you could have gotten unlimited bitcoin and then you would have infinite dollars,” said Daniel Polotsky, CEO of CoinFlip, one of the largest bitcoin ATM companies in the United States
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“It is the best performing asset of the past decade, for sure,” he said.
If you bought bitcoin a little later and kept the asset through the ups and downs, you would still see remarkable returns on your initial investment.
Millions in earnings
Let’s say you entered the game when a bitcoin cost 10 cents, around October 2010. If you invested $ 100, you would be able to buy around 1,000 Bitcoin.
At its highest point on Thursday, those 1,000 Bitcoin would have been worth more than $ 48 million, not counting the composition and assuming you bought and kept the asset all the time.
Certainly, it is a long time to maintain a highly volatile asset, which means that the group of people who invested in bitcoin so early and maintained their investments is small, said Polotsky.
And while there are many stories of extreme earnings from those invested in cryptocurrency, there are also many who have lost so much money buying and selling the unstable asset at the wrong time.
In addition, investors who have kept bitcoin for so long have had trouble actually withdrawing their incredible earnings due to technical problems – some have forgotten their digital wallet passwords, which means they have only a few attempts to access funds before they are blocked out forever.
Still, bitcoin is on an incredible trajectory that has outpaced other investments. So far, in 2021 alone, the cryptocurrency has increased by more than 63%, after quadrupling in value in 2020.
What is driving these returns
More recently, the price of bitcoin has been driven by high-level support. On Thursday, Bank of New York Mellon said it would provide custody services for digital assets, citing growing customer demand.
Earlier this week, Mastercard also said it would start offering support for cryptocurrencies on its network this year. And on Monday, Tesla announced that it bought $ 1.5 billion in bitcoin and would soon start accepting the currency as payment.
And while the cryptocurrency has also shown its trademark volatility in recent weeks, longtime bitcoin bulls see even more returns in the future of the asset.
Mike Novogratz, CEO of Galaxy Digital and a well-known cryptocurrency bull, said in November that he sees bitcoin rising to $ 55,000 or $ 60,000 in late 2021 as it continues to replace gold. Tyler Winklevoss, another bitcoin bull and co-founder of crypto-exchange Gemini, said he could see the asset reach $ 500,000 per coin one day.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Nuts.